The stock market

[Mike Sixel]

Just bought A LOT of Zoom. Figure I can make 5% in the next week or so, then sell.....like day trading, only in my IRA so there are no tax issues....

[gunnarthor]

 

Just bought A LOT of Zoom. Figure I can make 5% in the next week or so, then sell.....like day trading, only in my IRA so there are no tax issues....

I hope you do. Our company just added a lot of zoom accounts.

[Richie the Rally Goat]

I hope you do. Our company just added a lot of zoom accounts.

my company has Microsoft Teams... so MSFT might be a good one too

 

My kids elementary school just floated doing school via zoom because of that stupid a-hole from Osceola.... Zoom/slack and funeral homes look like good buys. Too bad I don’t have more cash on hand right now...

[Richie the Rally Goat]

Thank you. I sold a put on this last week at $130.

if they hadn’t suspended trading this morning your option would have enacted. It may yet later today... close to $30 loss in 19 days

[Mike Sixel]

This is why I shouldn't day trade..... Sigh.

[gunnarthor]

 

This is why I shouldn't day trade..... Sigh.

Sorry my friend.

 

I'm home with kids today. Watching MSNBC. They had a BOA bigwig on whose advice was essentially don't sell, don't buy, wait. He says it takes a few months for a bear market to get to where it's going although this one might get there quicker. Long view, we should be ok. Short view, could be tough for a bit. 

 

[Mike Sixel]

No biggie. I know the risks..... I'll just hold it in my retirement account. I figure I'm up to six years of lost retirement savings, taking into account compounding going forward. That's gonna hurt, given my age.

[glunn]

 

No biggie. I know the risks..... I'll just hold it in my retirement account. I figure I'm up to six years of lost retirement savings, taking into account compounding going forward. That's gonna hurt, given my age.

We may have to retire later than we planned.

[ashbury]

We may have to retire later than we planned.

My dad retired around 1992. He's thinking of going back and changing it to 1997.

[glunn]

I am thinking that Friday was a dead cat bounce, and hoping that it continues on Monday. Monday might be a good day for hedging.

[ashbury]

I am thinking that Friday was a dead cat bounce, and hoping that it continues on Monday. Monday might be a good day for hedging.

I'm hardly expert but I think most DCBs last less than a day and the enthusiasm can be seen dying out before the end of trading as the few bargain hunters finish their scavenging and no one else steps in to do some more. What this market is reflecting is new data and new announcements coming out daily, by turns worrisome and optimistic. I don't personally feel talented enough to forecast what comes next, so I'm sitting tight. At the moment money is to be made not by day-trading but by lightning-fast algorithms that let you elbow ahead of fellow traders by milliseconds to take advantage of the volatility.

[Mike Sixel]

I think next week will see a solid decline in prices. That bounce was huge, but I don't think people realize what social distancing is really going to mean........

[Richie the Rally Goat]

I think next week will see a solid decline in prices. That bounce was huge, but I don't think people realize what social distancing is really going to mean........

With the Fed rate cut, it appears with all three major futures indices down to the limit (4.5-4.8%) that the market agrees with you.

 

The uptick was probably just the algorithms...

[glunn]

 

I'm hardly expert but I think most DCBs last less than a day and the enthusiasm can be seen dying out before the end of trading as the few bargain hunters finish their scavenging and no one else steps in to do some more. What this market is reflecting is new data and new announcements coming out daily, by turns worrisome and optimistic. I don't personally feel talented enough to forecast what comes next, so I'm sitting tight. At the moment money is to be made not by day-trading but by lightning-fast algorithms that let you elbow ahead of fellow traders by milliseconds to take advantage of the volatility.

I don't have the time to trade while the market is open, but it's easy to play the options market by putting in trades for the next day. For example, I just entered an order to sell a McDonalds (MCD) January 2021 put tomorrow at a strike price of $150. MCD closed on Friday above 177. I am hoping that some algorithm freaks out if the stock market tanks, because my order is for a premium of $15, so MCD will need to go below $135 for me to eventually lose on the trade.

 

Most of my trades are not getting executed, but I see opportunities to buy solid companies at huge discounts and to keep large premiums if the call options expire.

[Mike Sixel]

Guess I should have followed my gut last night / this am.....oh well. OTOH, the zm bet looks ok....

[Mike Sixel]

Thinking of buying calls on disney, as Apple or some other huge company sitting on cash may want to buy them.....plus, they'll survive, and people will flock to theaters once they can go again. They are below their 5 year low (give or take a bit).

[glunn]

 

Thinking of buying calls on disney, as Apple or some other huge company sitting on cash may want to buy them.....plus, they'll survive, and people will flock to theaters once they can go again. They are below their 5 year low (give or take a bit).

You might also consider selling puts.

[gunnarthor]

[gunnarthor]

 

I don't have the time to trade while the market is open, but it's easy to play the options market by putting in trades for the next day. For example, I just entered an order to sell a McDonalds (MCD) January 2021 put tomorrow at a strike price of $150. MCD closed on Friday above 177. I am hoping that some algorithm freaks out if the stock market tanks, because my order is for a premium of $15, so MCD will need to go below $135 for me to eventually lose on the trade.

 

Most of my trades are not getting executed, but I see opportunities to buy solid companies at huge discounts and to keep large premiums if the call options expire.

Rough day. I was in court all morning so came out to see the disaster. Out of curiosity, what platform are you using to do your trades?

[Richie the Rally Goat]

You might also consider selling puts.

MMM opened today at 129.86 did your put option vest (or whatever it’s called)?

[glunn]

 

MMM opened today at 129.86 did your put option vest (or whatever it’s called)?

It is now subject to exercise, but the party on the other side has not acted so far, which is not unusual. 

 

I expect a bounce tomorrow, but capitulation before the end of the week. I wish that I had waited longer to start going long. On the other hand, considering the prospects for fixed income, I think that equities will come back strong after the virus runs its course.

[Hornhead]

A bit off topic but thought I'd throw an idea out there that might help some.  Rather than buying individual stocks, I've been considering using that money to pay the tax on converting a portion of my traditional 401K to Roth 401K.  Then when the market bounces back, all those gains will be tax free.  Not all employers offer the Roth 401K and I still need to check if they allow a conversion, but this seems like a nice way to take advantage of current market conditions.  Or if you've ever been waiting for a good time to start or contribute toward a Roth IRA, timing won't get much better.  You can make your 2019 and 2020 contributions up until the tax filing deadline.

[ashbury]

Spot oil is down another 10% this morning; it's below half of what it was a month ago, failing to find a support after a brief rally a week ago. Until this commodity reverses itself, I'm not expecting much optimism except wishful thinking in the wider market.

[gunnarthor]

 

Spot oil is down another 10% this morning; it's below half of what it was a month ago, failing to find a support after a brief rally a week ago. Until this commodity reverses itself, I'm not expecting much optimism except wishful thinking in the wider market.

It's my fault. I bought a bit of Exxon when it hit its ten year low. I apologize to everyone.

 

My opinion is that until the virus gets under control, the market won't be safe to invest in. Some stocks will ride this out better than others. I'll probably eventually make a fairly large buy in an index fund but not for a while.

[Mike Sixel]

I also bought yesterday, with the news that the government might infuse cash to the demand side. Ooops.

[glunn]

 

A bit off topic but thought I'd throw an idea out there that might help some.  Rather than buying individual stocks, I've been considering using that money to pay the tax on converting a portion of my traditional 401K to Roth 401K.  Then when the market bounces back, all those gains will be tax free.  Not all employers offer the Roth 401K and I still need to check if they allow a conversion, but this seems like a nice way to take advantage of current market conditions.  Or if you've ever been waiting for a good time to start or contribute toward a Roth IRA, timing won't get much better.  You can make your 2019 and 2020 contributions up until the tax filing deadline.

I think that could turn out to be a GREAT strategy, and I have seen articles recommending it.

[glunn]

 

I also bought yesterday, with the news that the government might infuse cash to the demand side. Ooops.

Me too. Very painful today.

[Richie the Rally Goat]

A bit off topic but thought I'd throw an idea out there that might help some. Rather than buying individual stocks, I've been considering using that money to pay the tax on converting a portion of my traditional 401K to Roth 401K. Then when the market bounces back, all those gains will be tax free. Not all employers offer the Roth 401K and I still need to check if they allow a conversion, but this seems like a nice way to take advantage of current market conditions. Or if you've ever been waiting for a good time to start or contribute toward a Roth IRA, timing won't get much better. You can make your 2019 and 2020 contributions up until the tax filing deadline.

agreed with Glunn. It’s pretty safe to say, depending on investment horizon, you’ll pay higher income taxes closer to retirement than you pay right now, so might as well bite the bullet.

 

If your employer offers a Roth 401k, you could make your contributions monthly after taxes on your paycheck. My employer includes the Roth on match funds too, so you could replace your pre tax 401k with the after tax variety, to an extent. Unfortunately the Roth contribution limits are lower than pretax.

[Hornhead]

My plan will only let me covert my traditional 401K to a Roth IRA, which may be better than a Roth 401K anyway.  Haven't heard much talk about converting to Roth but seems to make a ton of sense.  Appreciate the positive feedback here as I get ready to make the move tomorrow.  Also switched my furture contributions to a Roth 401K.  Might as well try to made some lemonade.  I also don't have to feel guilty about taking advantage of panicked sellers.  Just shrinking the share of the pie going to Uncle Sam if all goes well.

[glunn]

 

My plan will only let me covert my traditional 401K to a Roth IRA, which may be better than a Roth 401K anyway.  Haven't heard much talk about converting to Roth but seems to make a ton of sense.  Appreciate the positive feedback here as I get ready to make the move tomorrow.  Also switched my furture contributions to a Roth 401K.  Might as well try to made some lemonade.  I also don't have to feel guilty about taking advantage of panicked sellers.  Just shrinking the share of the pie going to Uncle Sam if all goes well.

You might want to wait a bit. I won't be surprised if the market drops another 20%.